Russian Roulette: Sportradar Profiting As CEO Holds Large Stake in Russian Sportsbook

The post Russian Roulette: Sportradar Profiting As CEO Holds Large Stake in Russian Sportsbook appeared first on SportsHandle.

Since Russia began its military invasion of Ukraine on Feb. 23, top global corporations such as Apple, Disney, and McDonald’s have suspended operations in Russia in light of that nation triggering the largest European security crisis since the Cold War.

Like those Fortune 500 companies, the world’s largest sports betting companies have followed suit, with one notable exception: Sportradar AG. Sportradar CEO Carsten Koerl, who became a billionaire when the company went public last September, is also a large shareholder in a prominent Russian sportsbook, Sports Handle has learned. When Sportradar will leave Russia, if it decides to depart the country at all, is anyone’s guess.

Economic sanctions against Russia currently prohibit its two largest banks from gaining access to the U.S. dollar, while prompting Western countries to cut off other Russian financial institutions from the SWIFT messaging system. The sports world has also swung into action, as FIFA and UEFA banned Russian clubs and national teams from all competitions, including 2022 World Cup qualifying. Nike shuttered more than 100 stores in the country. By March 1, nearly $1 trillion in Russian assets around the world had been frozen as a result of economic sanctions.

Weeks before Russian President Vladimir Putin directed the invasion of Ukraine, Koerl served on a sports betting panel at the 2022 NBA All-Star Tech Summit, a Feb. 18 event headlined by scheduled appearances from NBA Commissioner Adam Silver, Dallas Mavericks owner Mark Cuban, and Celtics co-owner Stephen Pagliuca. Koerl’s appearance on a panel alongside ESPN Chairman Jimmy Pitaro and Turner President Lenny Daniels made sense considering the NBA received an equity stake in Sportradar as part of a historic November data partnership.

In a Cleveland ballroom full of savvy businessmen, even the keenest observer of international relations would have failed to predict the spillover effects the Ukraine conflict would have on the sports world. Less than two weeks later, on March 2, the NBA pulled all business from Russia.

The NHL had acted more swiftly as the invasion escalated, suspending its commercial relationships with all Russian business partners on Feb. 28. The decision impacted a three-year deal with Moscow-based gambling company Liga Stavok that the league signed last November.

Major sportsbook operators moved early this month to distance themselves from the Russian sports scene. On March 3, DraftKings announced it would pull lines on sports events in Russia and Belarus, as well as Russian leagues such as the KHL. FanDuel had done the same earlier in the week, while Caesars stopped offering lines on sports events inside Russia even earlier, according to sources.

Among data providers, Genius Sports discontinued business activities in Russia and Belarus on March 7. Another prominent sports betting tech provider, Kambi plc, has never had commercial operations in Russia, a company spokesperson confirmed.

Through all that, one major global sports betting company remained conspicuously mum: Sportradar.

If you pull down the curtains, which some may perceive now as a renewed “Iron Curtain,” Sportradar’s initial silence on the major international conflict — created by a country where its CEO has business interests — could be viewed as deafening. As of Sept. 15, 2021, Koerl owned a 23% stake in OOO PMBK, an entity that appears to be the holding company of Liga Stavok, the sportsbook that partnered with the NHL. When Sportradar made its U.S. public debut last September, the data provider disclosed that it generated at least $5 million in revenue through its commercial relationship with the company over a two-year period ending Dec. 31, 2020.

Asked about Koerl’s outside business activities in Russia, Sportradar told Sports Handle on Thursday night that the executive has a “minority beneficial interest in OOO PMBK.”

“As a minority shareholder, Mr. Koerl does not control the entity, nor does he have any operational responsibilities or authority within the company,” a Sportradar spokesperson said in a statement.

Sportradar did not make Koerl available for an interview.


At the same time, there are strong indications that Liga Stavok is affiliated with Suleiman Kerimov, a Russian billionaire and politician with ties to Putin. Kerimov, who owns a majority stake in Russian gold mining company Polyus Gold, was placed on the U.S. Treasury’s Department’s list of specially designated nationals in 2018 in connection with money laundering and tax evasion charges he faced in France. More recently, Kerimov was one of 15 individuals sanctioned by the European Union this month as part of a fourth sanction package against Russia since its invasion began. Polyus Gold is the largest gold producer in Russia. 

The byzantine connections are fraught with ethical complications even if Russia had not started a war. But the conflict shines new light on the relationship between Russia and major international corporations. More precisely, when facing painstaking moral questions on delivering profits to shareholders or taking a stand against a full-scale military conflict, what will a company do?

The question has weighed on global corporations over the last month, a period in which the White House says the Russian economy has shrunk by half. The astounding collapse reinforces the argument that economic sanctions may achieve their intended objective. But when the gulf between regulations and practices are too wide, there is always the chance that some cases will slip through the cracks.

Sportradar has yet to formally decide if it will pull out of Russia.

“Sportradar is evaluating and complying with all sanctions imposed by a broad array of government entities and sports leagues affecting Russia, Belarus and the Donetsk and Luhansk regions in Ukraine,” Sportradar wrote in a statement provided to Sports Handle on Thursday. “These sanctions apply to our business in the different jurisdictions where we operate.”

“Right now, we are urgently focused on actively assisting Sportradar employees in these regions and have created an emergency employee fund which will allow the company to provide impacted employees who are experiencing extreme and temporary hardship with financial aid,” the company said in the statement.

Sportradar is scheduled to report 2021 fourth-quarter earnings on March 30, three days before the NCAA Tournament’s Final Four.

A prominent gaming industry expert on integrity issues told Sports Handle that he would be surprised if Sportradar shuts down its Russian operations. If the company does so, the source predicts that it will not happen until after next week’s earnings call.

Companies like Sportradar collect live betting statistics from inside athletic venues and provide them to sportsbooks, which in turn use them to create their in-game markets. By the end of last year’s third quarter, Sportradar provided managed trading services to sportsbook clients in 192 countries. Some data companies have partnerships with professional sports leagues and provide what is referred to as “official league data.” As in-game betting proliferates, data is the rocket fuel that powers the engine.

Speaking with Sports Handle, a trading executive at a major sportsbook recalled a conversation he had with Koerl several years ago when Koerl predicted that data would revolutionize the sports betting industry. Looking back on it, Koerl was more than prophetic, the executive told Sports Handle.

Sportradar also touts its fraud detection capabilities in identifying match manipulation abuses across the global sports betting ecosystem. Last year, Sportradar’s Universal Fraud Detection System for bet monitoring uncovered suspicious activity in more than 900 matches worldwide, the company said in a March press release. The matches spanned at least 10 sports in 76 countries around the world.

Last June, the International Table Tennis Federation renewed an integrity partnership with Sportradar through 2023. The expanded partnership provides the federation with access to Sportradar’s intelligence and investigation services. It came on the heels of the December 2020 arrest of a former top-ranked Australian player in connection with an alleged match-fixing scheme. The summer before, the Colorado Division of Gaming suspended betting on table tennis events in Ukraine after the division received credible information of irregular betting patterns in Ukrainian table tennis.

“It is our top priority to provide our partners with an effective framework to combat match-fixing and other integrity issues, especially when considering the increased risk to global sport as a result of the challenges brought about by the COVID-19 pandemic.,” said Andreas Krannich, the company’s managing director, integrity services.

An intricate web

Sports Handle obtained a 20-page confidential file crafted by a third-party security firm based in the U.K. that details the activities of First International Bookmakers Co., also known as PMBK. Interfax described First International Bookmakers as the holding company responsible for the operating structure of Liga Stavok.

In 2010, British online gaming company Sportingbet announced a multi-year joint venture with First International Bookmakers, which traded under the Liga Stavok brand, Reuters reported. When Interfax compiled a list in 2020 of the top Russian gambling companies, Liga Stavok, or “The League of Bets,” ranked first with revenue of 49.5 billion rubles over the previous year, far outpacing Fonbet, its nearest competitor.

Interfax also published a list of a few companies, as well as several individuals, that maintained an ownership stake in First International Bookmakers at the time of the June 2020 article. Two companies and three individuals held a stake of at least 15%, led by Switzerland-based Casako AG (23%). Koerl, Interfax reported, served as the sole owner of Casako at the time.

Owners of PMBK, as of June 2020, according to Interfax:

  • Casako AG — 23%
  • KHML Holding LTD — 15%
  • Tatyana Bashmakova, Alena Avdeeva, and Olga Zhuravskaya — 15% each
  • Dmitry Pavlovsky — 7%
  • The British XMLV Ltd — 5% (Viktor Yermolenko of XMLV is a Ukrainian national)
  • Dmitry Shumov — 5%

When evaluating the optics of Koerl’s possible connection with the Russian sportsbook, a former state regulator in the U.S. told Sports Handle that there is a discernible difference in assessing the relationship if the individual has a board seat with the Russian sportsbook. The regulatory scrutiny may be less exhaustive if the individual does not hold such a position.

“If he is in fact the largest shareholder, there is an assumption that he has an ability to affect the company,” the regulator said.

Koerl’s stake in PMBK, according to Sportradar’s filing with the SEC, is associated with Interactive Sports Holdings Limited, a Malta-registered company. In May 2016, Interactive Sports Holdings became incorporated in Malta, according to the International Consortium of Investigative Journalists’ (ICIJ) Offshore Leaks Database. Financial records obtained by Sports Handle indicate that Casako AG is a stakeholder of Interactive Sports Holdings.

While Malta has historically been viewed as a safe haven for gambling companies, a new corporate tax rate proposed last November could provide a disincentive for casinos to seek shelter there. Online gambling accounts for about 12% of the nation’s GDP annually, amounting to about €700 million.


The online gambling landscape in Russia

In Russia, sports betting is legal in four regions of the expansive nation, the world’s largest country by land mass. The regions include Kaliningrad, the western-most federal subject of Russia; Altai, a region located in southern Siberia; Primorsky in the southern far east; and Krasnodar, a territory along the Black Sea, home to the 2014 Sochi Winter Olympics.

Last August, Putin signed an executive order that designated Mobilnaya Karta (Mobile Card), a money transfer service, as the sole operator of online betting across the nation. That company, according to The Bell, “is owned by shareholders of the Liga Stavok office,” of which Koerl is the largest shareholder. Mobilnaya Karta, according to the story, had ties to the Russian oligarch Kerimov, who is among those currently under sanction by the U.S. and the EU.

Weeks after the U.S. Supreme Court’s 2018 repeal of PASPA, which paved the way for the expansion of legal sports betting beyond Nevada, Russia also made inroads into the expansion of online sports wagering.

Anton Rozhkovsky, who then served as chairman of Mobilnaya Karta, told the Russian media that a regulatory body of online gaming companies registered at least 1 million players that year. Mobilnaya Karta handled payment services for 10 bookmakers who belonged to the First Self-Regulatory Organization (First SRO) of Russian Bookmakers. By September 2018, at least 15 companies received online sports betting licensure, including Liga Stavok.

Another European publication, bne Intellinews, reported that while two payment processor centers competed for the designation, one supported by First Bookmakers prevailed. Shares in Qiwi, a Cyprus-based electronic payment company that lost out on the bidding, fell 8% on the news.

Kerimov, the Russian oligarch, has been dubbed the “Russian Warren Buffett,” in part for his risky investments in heavily indebted companies. At the turn of the century, he purchased oil trader Nafta Moskva at a steep discount, amounting to about 1,300 rubles (only $50), before rescuing the company from near bankruptcy. By the early 2000s, Kerimov reportedly secured enough in loans from Russian state-owned banks such as VTB and Sberbank to finance a major purchase in Gazprom, a St. Petersburg-headquartered, state-owned energy corporation. As of 2019, Gazprom ranked as the world’s largest publicly traded natural gas company.

One of his greatest strengths as an investor/entrepreneur is his ability to secure capital for loan purposes. An acute understanding of the global financial markets, and an ability to shrewdly negotiate favourable deals has been his strength over the years. Close relationships with influential people have certainly helped him to become a business titan in Russia, and globally.

—, a personal finance consultancy group, on Suleiman Kerimov

Long active in Russian politics, Kerimov has represented the Republic of Dagestan in the Federation Council of Russia since 2008. In March 2017, Putin bestowed upon Kerimov the Order for Merit to the Fatherland of II degree for his outstanding contribution to the development of parliamentarianism and legislation.

In November 2017, Kerimov was arrested by French authorities on tax evasion charges. By the following April, Kerimov was one of seven Russian oligarchs designated as a blocked individual by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). Kerimov, according to OFAC, allegedly carried suitcases with as much as €20 million at a time into France without disclosing the funds to tax officials. Furthermore, Kerimov was accused of laundering the funds through the purchase of several luxury villas. French tax authorities accused Kerimov of failing to pay taxes of €400 million in relation to the villa purchases.

In 2015, Forbes cited two independent sources in reporting that Kerimov maintained an ownership stake in Liga Stavok. At the time, another company, Akira Invest Corp., owned a 30% stake in PMBK, Forbes reported. Liga Stavok is closely connected with the late Russian gaming lobbyist Oleg Zhuravsky, the former president of the First Russian Self-Regulatory Organization. In 2015, Zhuravsky told Forbes that he was part of an investment consortium into the sportsbook, but Kerimov wasn’t part of it.

Zhuravsky, who reportedly died in 2017, passed his 16.5% share in Mobilnaya Karta to his widow Olga Zhuravsky, according to Russian media. (It should be noted that not all media outlets in Russia are to be trusted implicitly.)



On March 15 of this year, the EU listed Kerimov as one of several individuals targeted in its latest round of economic sanctions. The EU also designated Chelsea FC soccer owner Roman Abramovich and Viktor Rashnikov, owner of MMK, one of the world’s largest steel producers, in the sanctioning package. Kerimov amassed a portion of his $9.8 billion net worth through an association with Sergei Roldugin, whom the EU described as the “caretaker of Putin’s wealth.”

Like Abramovich, Kerimov also purchased a European professional football club, but one with much less fanfare than Chelsea. In 2011, Kerimov bought FC Anzhi Makhachkala, a football club in the Russian Football Premier League. Within months of the purchase, he gave the club a summer transfer budget of more than €230 million in an effort to make the UEFA Champions League. Kerimov’s tenure is known most for the 2011 signing of Cameroon striker Samuel Eto’o from Inter Milan for a €21 million transfer fee, with a world-record €20.5 million annual salary.

By 2015, Sportradar announced a multi-year data partnership with the Russian Premier League, under which the company became the league’s official sports data partner. But after repeated failures to qualify for the Champions League, Kerimov cut the team’s player budget dramatically. Kerimov sold the club in December 2016.

Kerimov’s status as a Specially Designated National by the Treasury Department could have state licensing implications. If, in fact, Liga Stavok shareholders do own Mobilnaya Karta, and if Mobilnaya Karta does still have ties to Kerimov, U.S. state investigators should take a judicious approach in reviewing the Russia matter, the former regulator interviewed by Sports Handle indicated. Since Kerimov has been sanctioned internationally by two of the world’s largest governmental bodies and remains a blocked person in the U.S., Sportradar should not be doing business with the oligarch, the source emphasized.

A quick perusal of the Liga Stavok website indicates that the sportsbook still offers lines on the NBA, NHL, and the Miami Open, a 12-day ATP Masters 1000 event in tennis that runs through April 3. Liga Stavok does not have lines on March Madness.

Since 2015, Sportradar has employed at least two former Liga Stavok executives, according to an industry source.


Liga Stavok

The fallout

The Ukraine conflict comes as sports betting-related stocks have been battered over the last four months, amid fears of runaway inflation and long-term profitability concerns across the industry. The world’s two largest sports betting data providers, Sportradar and Genius Sports, have been impacted severely. Although Sportradar had a market capitalization of $4.8 billion on Thursday, the company dipped below $15 a share on the session, nearly 45% below its value during its September IPO.

Genius, meanwhile, closed at $4.72 a share on Thursday, remaining near a 52-week low. Last May, in the aftermath of the company’s exclusive data partnership with the NFL, Genius traded above $24, near an all-time high. The Genius-NFL deal could be valued at north of $1 billion over the life of the contract, if the partnership lasts beyond four years, CNBC reported last spring.

One factor in why Sportradar may be hesitant to shut down operations in Russia, according to an industry source, lies in the fact that its business is thriving in Europe, specifically in the Eastern bloc. Sportradar’s roots date back to the early 2000s when two Norwegian computer programmers founded data company Market Monitor AS in 2001. Koerl, who launched European sports betting operator bwin in 1997, purchased a 51% stake in the company, which then morphed into Sportradar.

Koerl has turned his initial $135,000 investment in Sportradar into a return of more than $1 billion. As of Thursday, Koerl had a real-time net worth of $1.4 billion, according to Forbes, which lists him among the world’s top 2,500 billionaires.

From a political standpoint, Sportradar insiders with an Eastern European background may view the conflict differently than those with Western ties, a veteran gaming source explained. Consider that Sportradar generated €3.2 million from PMBK in 2019, the company disclosed in an SEC filing. At that rate, it would take partnerships with only 10 Eastern European sportsbooks to clear €30 million in annual revenue.

As Sportradar releases full-year 2021 earnings next week, a consensus is forming that its U.S. division is lagging far behind other segments around the world. Given the U.S. market is still nascent, the division requires a few years to play catchup, but global data providers are “bleeding money” right now in the U.S., as one gaming analyst put it. Even Koerl has been quick to admit it.

Sportradar’s adjusted EBITDA margin from its U.S. segment came in at -34% in the third quarter of 2021, an improvement from the previous year’s quarter of -60%, but still well in the red. By comparison, Sportradar reported adjusted EBITDA of  €9.6 million from its Rest-of-the-World average segment, up 220% year-over-year, as adjusted EBITDA margins improved. Consequently, the data providers are increasingly dependent on their Eastern European and Asian segments to pick up the slack for the American side.

The spring calendar represents the most hectic period for sportsbooks, with the Final Four around the corner and the MLB season set to begin next month, followed by the playoffs in the NBA and NHL. That loaded schedule could affect any reaction by operators to Sportradar’s purported Russian ties, if it matters to them.

For sports outside the top four leagues (NFL, NBA, NHL, and MLB), a sportsbook could turn to other suppliers for in-game data feeds, a trader from a major sportsbook company told Sports Handle. But for major sports with an official data partnership with a supplier, the transition is more difficult. With the NBA, for instance, an alternative feed is roughly “seven to eight seconds” slower than the official one provided by Sportradar, according to the source. But if a state regulator strips a company of its supplier license, a sportsbook would need to sever ties with the company immediately, the trader said.

It is only natural to question whether the top North American leagues all did their proper due diligence in vetting sports betting companies with Russian ties. Did the NHL investigate any connections between Kerimov and Liga Stavok before signing the three-year partnership? Separately, the NHL signed a 10-year data partnership with Sportradar in September that grants the league up to 1.8% in equity in the St. Gallen, Switzerland-headquartered company. While the NHL completed the deal approximately two weeks before Sportradar’s disclosure of Koerl’s outside business activities, how closely did the league monitor the executive’s investments into other sports betting ventures in so-called gray markets?

The NHL is hardly alone. Before the NFL’s landmark deal with Genius, Sportradar secured exclusive rights to disseminate the NFL’s official betting data to U.S. sportsbooks in August 2019. Since 2012, the NFL has hosted more than two dozen games in stadiums outside the U.S., in locations such as London, Toronto, and Mexico City. As a result, to what extent did the league look into any outside business deals Koerl might have had with vendors in Latin America and Western Europe? The NFL retained a 7% equity stake in Sportradar US from a prior deal, Forbes reported.

In addition, the NFL announced in February that Munich will host the league’s first-ever regular-season game in Germany next season. Regular-season games held in new cities outside the U.S. increase the potential for the expansion of NFL in-game betting in those gray markets.  Equally important, has the NFL done its proper due diligence into any related party transactions involving top Genius Sports executives?

As of March 24, Genius suspended all contracts with its Russian and Belarusian sports betting entities, while all relevant services have been disabled, a company spokesperson told Sports Handle. Last week, Genius began the process of disabling the main elements of its software used by commercial partners in the countries.

“Our priority remains ensuring the safety and well-being of our colleagues, their families, and loved ones in the region,” the company said in a statement. 

NBA owners have Sportradar connections

When it comes to the NBA, a trio of high-profile owners — Cuban (Dallas Mavericks), Michael Jordan (Charlotte Hornets), and Ted Leonsis (Washington Wizards) — are affiliated with Sportradar. In 2015, three years before the PASPA decision, Cuban and Jordan took part in a $44 million funding round spearheaded by Revolution Growth. Leonsis joined the other two owners on Sportradar’s advisory board.

Jordan doubled down last September when he increased his investment in Sportradar. Given the boundless popularity of the NBA in China, where league officials estimated 300 million people played basketball in 2019, it is reasonable to question how diligently the NBA inspected Sportradar’s activities in Asia.

Still, there is some sentiment that the leagues are collectively turning a blind eye to international monitoring responsibilities. Considering the short history of deals between leagues and betting-related companies — including data, tech, and service providers, as well as the sportsbook operators themselves — “the diligence that has not been done is astounding,” the integrity expert told Sports Handle.

The leagues are only one piece of the complex puzzle, he emphasized. While highly principled books may police themselves, there are disincentives for operators to self-report and fully disclose all of their corporate partnerships. State regulators are tasked with protecting consumers from unfair business practices, but numerous states are short-staffed and new to the wagering game. Federal oversight is scant, and from a global perspective, there is not an overarching agency that has jurisdiction over cross-border transactions in sports betting.

In the financial services industry, the SEC enforces the law against market manipulation, while agencies such as FINRA and the CFTC regulate brokerage firms and the derivatives markets, respectively. On an international basis, the Financial Action Task Force crafts policies to combat money laundering in the global arena.

Sports betting isn’t exactly on par with the financial services industry in terms of oversight, regulation, and compliance, the expert indicated. If the proper guardrails were in place, perhaps connections between powerful sports betting corporations, offshore tax havens, and autocratic regimes could be spotted more quickly.

“Someone needs to do it — it’s not happening, and unfortunately it leaves us all vulnerable,” the expert said.

Jill R. Dorson and Brett Smiley contributed to this story.

The post Russian Roulette: Sportradar Profiting As CEO Holds Large Stake in Russian Sportsbook appeared first on SportsHandle.

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